The Romanian banking sector has a lot of potential that could materialize in the near future, and it is currently experiencing five major trends – consolidation, strong focus on increasing performance, digitalization, decision making process moving from local to regional level and increasing partnerships with fintech companies, Alina Radu, partner at NNDKP, said at BR’s Foreign Investors Summit.
“All of us agree that Romania is one of the most valuable markets in the CEE and there is huge growth potential. There are lots to be improved but the basic truth is that there’s a lot of potential and we all want to see it materialize in the near future,” she pointed out.
The expert revealed the five major trends in the local banking sector:
It has been accelerating during the past 2 years and it will continue – there are banks currently for sale and attracting interest from existing banks which intend to increase their market share.
“Banks currently going through integration processes following M&A, probably others to follow as banks are in the process of being acquired,” Alina Radu said.
- Strong focus on increasing performance at the core of most banking institutions
“Will be done with different approaches from each bank but the essential thing is that banks are focusing on what they consider their core business. They will dispose of other parts of their business, sell them or stop offering those services,” the expert estimates.
- Digitalization, automation
“In a few years we’ll see the experience of working with banks be completely changed as they digitalize.”
- Decision making process gradually moving from local to regional level
This trend is not seen only in the banking market but also in other industries and is mainly due to the need to manage risks and to control costs.
“It has advantages but also disadvantages – there’s local insight on specifics on culture and intangible elements that are difficult to be transferred to the regional level,” Alina Radu says.
This trend could in the medium term create opportunities that may be missed on the local market.
- Increase in partnerships between banks and fintech companies
“This changes customers’ experience and offers them lots of ancillary services that could help them manage their business,” the expert pointed out.
These partnerships are important for entrepreneurs as banks could offer to their customers access to software and technology helping them to deal with accounting aspects, managing invoices, stocks and other aspects in their day-to-day operations.
“A mix of financing is required because banks can’t help all businesses in Romania. We need other players to help grow businesses,” she added.